Sep 9, 2016

Weekly update

The same crap.... which is more interesting and faster:
a) watching your hair growing?
b) watching paint drying?
c) watching the indexes the last 8 weeks?

This says everything - "Over the past 40 days, the Dow has traded in its tightest range in at least 100 years."

I will be away the weekend and next week, that is why I am posting one day earlier. Only two charts, there is no point posting the same charts from last week, analyzing 5 points range:)

Short term I am not sure which pattern will play out. Because of the chart below(better looking 40day/20/40 week cycle) the red scenario looks more interesting - the zig-zag could mutate to even bigger zig-zag(red), the other option is the indexes continue crawling higher. It is not really important.
Around 2160 the buyers stepped in three times(three candles with long shadows and MA50) this is the line in the sand for the two scenarios. As long as the price stays above it green is still alive, but the indexes should rally today or on Monday.

UPDATE: looking the futures 1 hour before the opening the more bearish scenario red is playing out.... unless we see some crazy hockey stick move higher.

The big picture... I am scratching my head for a while and the more I watch the charts the more I think the market is throwing a curve ball and it will surprise most traders and forecaster. The EW guys will count 1-2 i-ii and than 3 to the moon, the cycle guys will count 40 week cycle low in November.... and I think this is wave 1 of ED and we are seeing stealth 40 week cycle low (we are already in the time frame for a low). The upside is limited and the low for wave 2 will be in Q1 2017 with 18 month cycle low.... than of course the bears will crawl out explaining how the market will move to zero.


  1. Thanks for the update Krasi. Are you still of the view indexes should rally today or Monday given your latest update on futures?

    1. Sorry for the late answer.... my update says lower(red) looks better and now it it obvious that it is playing out.

  2. Thanks for the update Krasi! Kind of timely. Have a nice break next week. Hope the baby is doing well.
    what are your targets for RUT? 1170? I was thinking 1150....61.8% retrace of previous wave 1? Thanks


    1. I was a little bit too late to see the big picture which showed the right path for the short term... a little bit angry, but I learn from my mistakes.
      RUT - we have impulse lower, waiting for confirmation corrective move higher. It is confusing RUT,EEM are saying lower, but SP500/DJ expecting bottom. So in wait and see mode for RUT.

      P.S. the little Emma is growing up and it is a lot of fun with her.... of course like every baby she has bad days:))

  3. I have a few observations:
    1) Krasi, You're awesome and thank you so much for creating this blog! Do you have an email address on the site? I was hoping to donate a couple beers to the blog if you have Venmo?
    2) Whenever Kali asks what would change your view, we should all pay attention
    3) Krasi should integrate his vacation schedule on the charts because it seems to line up well with important tops/bottoms or actual action ;-) Futures reached Krasi's target in afterhours and I think his chart is saying buy now, but I doubt he expected it to reach this level in one day...
    4) Kali - any thoughts from here?

    1. Ha-ha thnaks, I will accept one virtual beer althought I was a little bit too late... for the short term. It is just getting interesting in hte next 6 months.

  4. That is so funny you mention that!
    I am just learning this stuff so not inclined to give any thoughts. I love reading this blog and learning this stuff. Best wishes.
    - Kali

  5. Krasi,

    Do you think we are at first leg of a-b-c given the sharpness of the downturn Friday? Would you change your view of the market make new all time high after current move down?

    Thanks again,


    1. So far only a-b-c lower and the correction has not begun now it is running for very long time... that is why I was expecting move higher... until Friday before I have connected the dots for the big picture.
      Only a-b-c so far and strong right translated cycle the odds are still better for higher high. The bears have a lot work they need impulse lower for something more bearish.

      No, no change for the intermediate term even if the market makes new high(red points to higher high anyway).
      No mater lower high or higher high after that the next move is lower into Q1 2017.

  6. Is there an update because of the big decline on Friday?

    1. No, we are seeing exactly what we should see - fear around the bottom for the 40 week cycle low.

    2. According to your chart, you're looking for a low near about 5-6 trading days away? Am I reading your chart correctly? thanks.

    3. Yes, this move lower should not last very long, one more week bottoming and after that the high should be tested.

    4. Following up on Steve's question and correct me if I'm wrong Krasi but I don't think the dates on your short term chart are intended to be as relevant as the target level on the S&P which looks to be around 2123? Also that level was reached by futures after the close with a low of about 2119.75.. which should imply a low is behind us or will be hit tomorrow morning?

    5. Yes, the target is important and the lines a drawn with some reasonable slope. For the the longer term charts I try to fit time too.
      I was not expecting such fear and with fear it is a guessing work the bottom. Usually the bottom is tested 08.2015 and 02.2016, but sometimes it is a V-shaped 10.2014 or 06.2016.
      We should see a bottom today if we have only a-b-c move(V-shape), but we could see a weak move higher for 1-2 days and slightly lower low(the "fear bottom" is tested) than we will have an impulse lower.
      Cycles do not help too. With strong right translated cycles the rule is expect M pattern(double top), but it could make slightly lower high or slightly higher high.

      What I mean is with the fear from Friday now it is a guessing work how exactly the bottom will look like. It could be today or it could be in a week.
      And I am talking about a bottom because the move is similar to that in August last year - long sideway move, the indicators are resetting and sudden discharge of fear.

  7. I'm using my Bloomberg terminal which has an Elliott Wave function that automatically draws major/intermediate waves. For anyone that cares it says we have 5 complete waves on the daily for RUT, Russell 2000 futures and IWM from the June low (both Major and intermediate waves). But on the 60min chart it shows 5 intermediate waves but completed major wave 3 (wave 4 running). S&P 500 is messier, SPY shows A-B-C complete on the daily after 5 major waves from February low; but S&P 500 index is showing C after major Wave 1 from June low on the daily.
    P.S. Krasi's counts seem to be much more reliable :)
    Happy to share the charts if you email me at

  8. Replies
    1. I just got back home. I have not slept a lot the last two days and I am dead tired.
      Probably short post on Tuesday.

  9. Get some rest Krasi!!! Chances are nothing will happen until FOMC anyways!
    Markets are getting some sleep too :-)